The effect of heat treatment and binder additions on the magnetic behavior of P/M(powder metallurgy) processed Fe73.5Si13.5B9Cu1Nb3 alloy has been investigated. FeSiBCuNb amorphous ribbons produced by plannar flow casting were annealed at temperatures between 480°C and 620°C for 20 to 60 minutes. The annealed specimens were milled using a pin crusher and a hammer mill. The powder was then mixed with mineral or polymer binders to press into a toroidal shape of inductor core at room temperature. Fe73.5Si13.5B9Cu1Nb3 alloy showed maximum permeability when annealed at 540°C for 40 minutes. The microstructure of the annealed ribbon has a ultra-fine α-Fe(Si) grain, ranging from 10 to 20 nm in diameter. Inductor cores produced using a glass binder showed better magnetic properties than polymers or oxide binders. The use of mineral binders in producing nanocrystalline inductor cores significantly improved magnetic properties, compared to a commercial moly-permalloy powder core.